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TMI Blog2016 (8) TMI 1385X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount being MAT credit entitlement ₹ 1,93,69,003/ is to be reduced while calculating book profit as is mentioned in item no.(i) of explanation 1 to sec.115JB(2) of the act. It was also noticed that alternatively if the amount of profit before the tax is taken for calculating book profit u/s. 115JB of the act and no adjustment are made with respect to income tax then also the calculation of book profit. It is clearly demonstrated from the above facts that the assessee has debited income tax provision of ₹ 1.94,00000 crores against which it has claimed MAT credit of ₹ 1,93,69,003/- therefore, the difference of ₹ 30,997/- was added to the book profit. In the light of the above and after considering the detailed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uently, the case was selected under scrutiny by issuing of notice u/s. 143(2) of the act on 6th August, 2013. The assessee is engaged in the business of manufacturing and trading of fertilizer. The assessing officer has completed the assessment u/s. 143(3) of the act on 27th Feb, 2015 by assessing book profit at ₹ 9,73,47,261/- and determining the loss at ₹ 5,59,73,070/-. Thereafter, the assessing officer has passed order u/s. 154 of the act on 11th Jan, 2016 by adding income tax provision to the amount of ₹ 1,89,81,032/- to the book profit and determined the revised book profit at ₹ 11,63,28,293/-. 4. The assessee preferred appeal before the ld. CIT (A). The ld. CIT (A) has deleted the addition of ₹ 1,89,81 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings appellant has restated its contention made before the A.O. Considering explanation-1 to section 115JB wherein it has been stated as follows:- Explanation 1. - For the purposes of this section, book profit means the net profit as shown in the profit and loss account for the relevant previous year prepared under subsection (2), as increased by - (a).... (b)... (c)... if any amount referred to in clauses (a) to (i) is debited to the profit and loss account or if any amount referred to in clause (j) is not credited to the profit and loss account, and as reduced by, - (i) the amount withdrawn from any reserve or provision (excluding a reserve created before the 1st day of April, 1997 otherwise tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k profit. Therefore, A.O. was not justified in making addition of ₹ 1,89,81,032/- on account of provisions of l.T. Act while calculating book profit u/s.115JB of the Act. This ground of appeal is allowed. 5. During the course of appellate proceedings before us, the ld. departmental representative has supported the order of assessing officer. On the other hand, ld. counsel has furnished paper book containing details and submission furnished before the assessing officer and CIT(A) during the course of assessment proceedings and appellate proceedings. 6. We have heard both the sides and perused the material on record carefully. The assessee company has filed its return of income showing book profit at ₹ 9,68,07,397/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (115) 3 Dividend Distribution tax of earlier year 3,406 4 Interest on Income Tax (Note No. 23 of the balance sheet) 3,84,680 TOTAL 4,18,98 It was also noticed that alternatively if the amount of profit before the tax is taken for calculating book profit u/s. 115JB of the act and no adjustment are made with respect to income tax then also the calculation of book profit would as under:- Particulars Amount (Rs.) Amount (Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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